FINAL CONTENTS Page No. SECTION A 4 1. INTRODUCTION 4

Nasrec Development JDA: 022/001 Stage 2: Business Plan FINAL September 2005

Page 1 of 54

CONTENTS Page No. SECTION A 4 1. INTRODUCTION 4

1.1. Background 4 1.2. The Nasrec Location 5 1.3. The Nasrec Vision 7

SECTION B 2. DEVELOPMENT DESCRIPTION 8

2.1. Location Analysis 8 2.2. Strategic Development Thrusts / Objectives 9 2.3. Alignment to Joburg 2030, IDP, RSDF

Region 9 and Metro Development Trends 10 Projects and Sub-Projects 11

2.5. Key Performance Indicators 14 SECTION C 3. CURRENT SITUATION 15

3.1. Strategic Context 15 3.2. The Social, Economic, Physical,

Stakeholder analysis, Natural Environment are fully described in the Urban Design Framework Plan in Chapters 2 and 3. 16

4. MARKETING 18 5. KEY SUCCESS FACTORS FOR THE DEVELOPMENT 21

6. RISK ANALYSIS AND MANAGEMENT 22

SECTION D 7. INSTITUTIONAL MANAGEMENT ARRANGEMENTS FOR

THE DEVELOPMENT 26 SECTION E 29 8. THE OPERATING PLAN 29 9. OUTSPAN AND OUTCOMES 30

9.1. Outputs 30 9.1.1. Job Creation, BEE and SMME 30

9.1.2. Community Facilities 30 9.1.3. Urban Fabric is enhanced 30 9.1.4. Housing Delivery 31 9.1.5. Economic Empowerment 31 9.1.6. Community Facilities 31 9.1.7. Parking 31

9.2. Outcomes 32

10. LAND MATTERS 33 10.1. Development planning implications 33 10.2. Facilitation and agency proposals 33 10.3. Roll out plan 33 10.4 Programs 33 10.5 Identified land required for development 33 10.6 Town Planning matters 33

11. PROJECTS 36

11.1. Overall approach 36


Page 2 of 54

11.2. Priorities Plan 36 11.3. Phase 1 – August 2005 to June 2007 41 11.4 Phase 2 – July 2008 to December 2009 42 11.5 Summary 43

12. FINANCIALS 46

12.1 Development Costs 46 12.2 Cash flow and Budgets 46 12.3 Sources of Funding 47 12.4 Funding Options 48 12.5 Funding Strategy 49 12.6 NASREC 2005/2006 budget proposal 51

13. IMPACT OF THE JOHANNESBURG 2010 SOCCER WORLD CUP ON THE TRANSPORT PLANNING 53 13.1. Introduction 53 13.2. CoJ Transport Planning implications 53 13.3. Recommendation 53

FIGURES Figure 1.1 - Urban Design Framework Plan and

Development Feasibility Study Preparation Process 5

Figure 1.2 - Micro Location – Johannesburg Local Context 6 Figure 1.3 - Conceptual Representation of Proposed

Development Initiatives Indicating the Pivotal Role of Nasrec 6

Figure 1.4 - Nasrec Vision Statement 7 Figure 2.2 - Study Area 9 Figure 2.4 - Nasrec Precinct Structure 11

Figure 2.5 - Extent of Phase One Proposal 13 Figure 3.1 - Surrounding Property Market and Land Uses 15 Figure 3.3 - Event Clustering 20 Figure 3.4 - Nasrec Precinct Clustering Approach 20 Figure 12.1- Index of major Projects 44 Figure 12.2- Public transport road network 47 Figure 12.3- Proposed Budget – Soweto Highway Ramps 51 Figure 13.1- Proposed 2010 Soccer World Cup security

area for Nasrec. 54 TABLES Table 2.1 - Project summary table 12 Table 6.1 - Risk Analysis and Management table 22 Table 10.1 - Area of land required for infrastructure 33 Table 11.1 - Nasrec infrastructure development

implementation plan in order of priority and strategy 37

Table 11.2 - Development Infrastructure plan 45 Table 12.1 - Development cost estimate 46 Table 12.2 - Development budget estimate 46 Table 12.3 - Funding strategy 50 Table 12.4 - 2005/2006 budget proposals 52 ANNEXURES A. Project Fact sheets B. Project Timelines


Page 3 of 54

Executive Summary- Nasrec Business Plan In the Urban Development Framework designed by the Nasrec Consortium and approved by the City of Johannesburg’s Council, a vision of a world class sport, tourism, and exhibition node was presented for Nasrec to fuel sustainable social and economic activity including public and private sector involvement. Using the 2010 Soccer World Cup designation of the Soccer City stadium at Nasrec to be a favourite venue to host the finals, created a catalyst to spur some immediate economic, transport, health and social services. Importantly, the much needed investment will integrate the urban fabric in the south, linking the Johannesburg CBD to the Nasrec precinct and to the areas south of Aeroton and Soweto. In essence, the Nasrec vision closes the missing link in the City’s south-western corridor. The five major thrusts include Soccer, Golf, Expo, Retail/Commercial and Recreation. The framework therefore designated the various immediate Stage 1 projects and the longer term Stage 2 precinct land development proposals. As time is becoming of the essence to meet the challenges of Stage 1 project delivery a concise but focused Business Plan needed to be developed which would inform the implementation of the framework recommendation. Fundamental to this plan is that the institutional structure for the implementing authority be established so that any plans, reports and actions are co-ordinated with all affected and interested parties to best effect for the precinct and its users. To this end it is recommended a Section 21 Company or similar structure (such as a Voluntary Association) (hereafter referred to as the Nasrec Management Company or NMC) be incorporated with a

representative stakeholder Board but managed by the JDA to start earnest land acquisition and land manufacturing procedures. Key to the successful continuation of the precinct is an exit strategy for the JDA as implementing and managing agent after 2010 or maybe after 2011 if the Rugby World Cup is awarded to SA. For the longer term it is vital that the city and the NMC embraces the Nasrec development and owns and manages it after 2010 and works alongside interested parties to realize the longer term 2030 aligned framework for the city. While the approvals for such processes are negotiated it is recommended that the JDA appoint with immediate effect a marketing consultant to convert this business plan and the design framework into a powerful branded message for the national and international community. Not only will this become a progress report on 2010 planning for the precinct but will alert all investors to the longer term opportunities and plans within the node. The National Department of Transport, the City of Johannesburg and its UACs including the Johannesburg Development Agency (JDA) will then busy itself with funding, detail design/implementation and liaison activities to realize the two stage vision for the area largely informed by this business plan. Notable will be its adherence to the BEE requirements of the country in awarding its proposals, ensuring that labour based employment opportunities immediately benefit some of the most impoverished communities on its doorstep and that the momentum and vigour for the world cup is captured and retained within the precinct. The NMC will also be formed to coordinate the stakeholder’s interests by feeding into the implementing authorities, the interests of the land owners and community representatives.


Page 4 of 54

SECTION A

1. INTRODUCTION

1.1 Background The south-west of Johannesburg still bears the scars of the mining belt, the segregationist apartheid planning and the disrupted landscape. Historically, planning in the region aimed to racially divide and fragment residential suburbs and social infrastructure. Iprop Limited, in particular, has been trying to integrate the area into the metropolitan fabric through planning and development initiatives With recent interest, both from the private and public sectors, in areas like Soweto and the southern suburbs, there is fresh impetus for development in the south-west and at Nasrec itself. Having earmarked Nasrec as a key focus point for re-development in the southern part of the city, the Nasrec Land Owners Forum (NLOF) including the City of Johannesburg (CoJ) seeks to stimulate a cluster of sporting, tourism, and related economic and property activity that will boost both Nasrec and surrounding areas. This is in line with CoJ’s vision to create a world class metropolis. The Nasrec Consortium has after an extensive and detailed investigation and planning process completed the Urban Design Framework Plan (UDFP) November 2004 and the Development Feasibility Study (DFS) January 2005, Stage 1 of the development process for the Johannesburg Development Agency (JDA). These studies have revealed that Nasrec has the required potential to develop into a world-class sports, tourism and exhibition node, bringing economic activity to the under-developed south and contributing to Johannesburg’s goal of becoming a world-class city. Although many opportunities exist at Nasrec and there are existing clusters that can be nurtured and grown, the node does have to confront some locational disadvantages that need careful

management. Nevertheless Nasrec is well-placed to take advantage of the new momentum that the 2010 Soccer World Cup is generating. Private investor interest in the previously under-developed south-western region of the city is an indication that the timing for Nasrec is favourable. To this end the UDFP process was engaged by government, business, community and social stakeholders to obtain broad consensus for the plans ahead. The UDFP recorded the process followed for the preparation of base information and forecasts that will impact the Nasrec node. The key purpose of the UDFP was to inform the DFS report which assesses the financial viability of the proposals identified. Figure 1.1 diagrammatically represents the process followed. This Business Plan report must therefore be read in conjunction with both the UDFP document and DFS Report. This business plan is the synthesis of outputs from both the UDFP and the DFS report into a practical and sustainable development that satisfies both the CoJ’s long term vision as well as accommodating the momentum of the primary catalyst, being the 2010 Soccer World Cup. Time is critical hence the key success to this development will be the effort and time taken to approve implementation and successfully complete the development before 1st July 2008 as required by FIFA’s programme for that occasion. Stages of the Nasrec Development

Stage 1: Urban Design Framework Plan and Development Feasibility Study

Stage 2: Development Business Plan Stage 3 - 7: Implementation of Business Plan (Projects

and Sub Projects)


Page 5 of 54

1.2 Location of Nasrec

Nasrec is located in Gauteng province, which generates some 40% of South Africa’s GDP. At metropolitan level (see Fig1.2), Nasrec is situated in Johannesburg, south-west of the CBD, and north-east of Soweto. The southern part of the city has traditionally been sidelined in favour of the fast-growth northern nodes, but this is slowly starting to change. Development at Nasrec may be well-positioned to exploit new development and economic interest in the south.

It is well known that the location of interchanges on freeways

attracts development due its accessibility to high mobility roads. Nasrec lies close to the N1 and N12 interchanges being Randshow Road, Soweto Highway, the future N17, Nasrec Road and Xavier Street as can be seen in Figure 2.2. With the changing development focus to the south, pressure to develop adjacent to these interchanges will intensify as part of the normalisation process.

As defined in the brief, the study area is bounded by: the Soweto

Highway to the north; Rand Show road to the south; the N1 Western-Bypass to the west; and Crown Mines Golf Course to the east (see Fig. 2.2). Located in Administrative Region 9 of the city, the study area is governed by the Region 9 Regional Spatial Development Framework (RSDF)

Figure 1.1: Urban Design Framework Plan and Development Feasibility Study

Preparation Process


Page 6 of 54

Figure 1.3: Conceptual Representation of Proposed

Development Initiatives Indicating the Pivotal Role of Nasrec

Figure 1.2: Macro Location – Johannesburg Context


Page 7 of 54

1.3 The Nasrec Vision 1.4 The Urban Development Framework (UDF) The Nasrec vision is to create a unique destination by efficiently leveraging existing exhibition and sports facilities, including the 2010 Soccer World Cup investment in a way that fuels real and sustainable economic growth. The support of both public and private stakeholders and the need to build stakeholder value are key to the Nasrec Development’s vision.

The Nasrec Urban Development Framework (UDF) seeks to provide the tools for viable, sustainable and appropriate development at Nasrec. It is a synthesis of previous and present planning efforts, composed of written statements supported by a variety of maps and illustrations. The primary role of the UDF is to guide development and promote land uses to create a sustainable physical environment that best serves the needs of the node and the region.

There are some key concepts in the vision. Nasrec needs to optimise its existing features and land uses, across the tourism, sporting, expo, and recreation and heritage sectors. It needs to be sustainable and diverse. It needs to be efficient and add value. Figure 1.4 describes the cluster approach taken toward developing this vision

The UDF has been prepared by the Nasrec Consortium for the Johannesburg Development Agency (JDA) and the Nasrec Landowners Forum (NLOF). It records the process followed for the preparation of base information and forecasts that will impact the precinct. A key purpose of the UDF is to inform the Nasrec Development Feasibility report, which will assess the financial viability of the proposals.

The UDF was developed through a participatory process. Steering and liaison committees were established to direct

participation with stakeholders, and the process involved three phases to ensure maximum potential for input. An overall vision for the node was crafted to guide the UDF in its work. The City of Johannesburg has approved this UDF.

1.5 The Development Feasibility Study The Nasrec Development Feasibility Report established the

framework for public sector capital investment for the JDA and City of Johannesburg. The function of the development feasibility report was to provide a broad assessment of estimated costs and likely benefits of implementing the Urban Design Framework’s phased approach and a preliminary risk assessment.

Figure 1.4: Nasrec Vision Statement


Page 8 of 54

SECTION B

2. DEVELOPMENT DESCRIPTION

2.1 Location Analysis Macroeconomic forces impacted heavily on the manufacturing sector in Johannesburg over the past decade. Combined with a global trend towards development on the urban periphery (Garreau, 1991), employment opportunities in the inner city and in the manufacturing belt immediately south of the city have declined. At the same time, growth in the industrial, commercial and residential sectors has moved northwards towards Sandton and Midrand, as well as to the east in areas such and Limbro Park, Longmeadow, which have evolved into Johannesburg’s main commercial centres. Other areas of commercial development include Woodmead, and Meadowdale. The south-western parts of the city and the Nasrec area were largely marginalized as a result, although areas such as Crown City have also become important. The UDF plans to close the current missing link effect and be proud of the resultant investment product This is changing and there has been discussion in the media about rising investment and development interest in Soweto particularly (Financial Mail, 2004). Private sector growth trends are recognised – and echoed – in the Gauteng Spatial Development Framework. A Primary Development Zone has been identified for the province: running northwards from Johannesburg, CBD along the M1 highway, through Midrand, to Pretoria and Mabopane. A second leg stretches eastwards from Johannesburg CBD as the Gauteng section of the Maputo Corridor. Adjoining this development triangle are areas called support zones.

Although Nasrec lies outside the primary zone, it does fall inside the secondary zone. Regionally, northern and eastern Johannesburg is favoured for economic development. Low-income households however reside in the south and west of the city, where investment activity is limited. Nasrec nevertheless displays several key locational advantages. It lies at the intersection of the city’s east-west and north-south development corridors, as delineated in the City of Johannesburg (CoJ) Spatial Development Framework (Fig. 1.3). The site is also positioned to make real social and economic gains if investment and employment can be attracted and boosted. The study area is approximately 420 hectares in size and includes: Soccer City; Expo Centre; Crown Mines Golf Course; An approved memorial park A small parcel of land earmarked for industrial use; The largest of three active slimes dams in the area, and Significant portions of vacant, publicly-owned land

interspersing these uses.


Page 9 of 54

Figure 2.2: Study Area

2.2 Strategic Development Thrusts / Objectives The NLOF members include the Nasrec owners being the Johannesburg Expo Centre, iProp Limited, Soccer City, and Department of Public Works. The full list of members can be found in the Urban design framework report, pg 108. The objectives that should be achieved by the development at Nasrec has been influenced by the NLOF workshop (2003/4) on the Nasrec node. The overarching aim is to guide sustainable physical,

social, economic and environmental regeneration and development of the Nasrec precinct. This can be broken down into seven individual objectives:

1. Stabilise and Improve the Area The built and open environment at Nasrec should actively help

stimulate and complement the adjacent and surrounding areas. A focus for Nasrec will be established if it can generate a sense of identity and create a unique brand.

2. Improve Transportation and Traffic Facilities Public transport is crucial for the future success of Nasrec. The

precinct’s transport system needs to be accessible by pedestrians and drivers alike; it needs to be safe; and it should work to enhance the public realm.

3. Promote a Variety of Uses If Nasrec wants to create a balanced, mixed-use and 24/7

environment, a cross-section of land uses is necessary. Institutional, commercial, residential and recreational should all be part of that mix.

4. Expand Event and Tourism Opportunities Nasrec has a natural niche in the tourism and eventing sectors;

this needs to be expanded, encouraged and actively promoted through development.

5. Increase Fiscal Revenue To attract investors, Nasrec needs to offer state-of-the-art

infrastructure and accessible technologies. Exposure to


Page 10 of 54

potential markets, and flexible development opportunities are essential, e.g. flexible erven sizes that allow a range of potential building types.

6. Promote an Economically Viable Place Logical, viable and phased development is another criterion for

attracting investors into the Nasrec node. 7. Promote a Place that Responds to the Environment Sensitivity to environmental considerations can be a competitive

advantage in attractive investors and tenants, and development at Nasrec must safeguard ecological systems and maintain or improve the environment.

2.3 Alignment to Joburg 2030, IDP, RSDF Region 9 and Metro Development Trends

The context of Nasrec as a development node within the dynamic’s of the regional and metropolitan goals and objectives are important in determining the sustainable role to be played by Nasrec. The Nasrec development node produced within the UDFP was carefully designed to be synchronised with the objectives of the following: • Regional Characteristics • Metropolitan Development Trends • Joburg 2030 • Regional Spatial Development Framework – Region 9 • Southern Development Corridor • East-West Development Corridor

• Baralink Development Framework • SOJO Trail • 2010 Soccer World Cup

The details of this exercise is documented within the UDFP [2.1 Context – Regional Characteristics Chapter 2: Status Quo]


Page 11 of 54

The seven zones are as follows: 2.4 Projects and Sub-Projects Zone 1: Soccer City The following projects and sub projects are based on the

development principles stated within the UDFP [Chapter 4, 4.2 Development Principles Pg 54] that forms the structure of the Nasrec Precinct Development. The 7 zones of development are as indicated in Fig 2.4 below.

Zone 2: Public Transport Hub [PTH] Zone 3: Nasrec Expo Centre Zone 4: Mixed Use High Street Zone 5: Residential and Accommodation Zone 6: Crown Mines Golf Course Zone 7: Parking Areas

Detailed spatial planning for each of the above zones have been undertaken in the UDFP [Chapter 4, 4.4 Precinct Structure, Pg 66] Table 2.1, the project summary table, lists the essential projects required to fulfil the infrastructure development objectives of the Nasrec UDF. This list is carried throughout this report relating priorities, costs, funding, priorities and roll out plan. In taking a conservative approach, notwithstanding current market related property take-up rates studied, a two phased approach was established. An incremental phasing strategy was established where Phase 1 and Phase 2 to include the following core projects as reflected in Table 12.2.

Figure 2.4: Nasrec Precinct Structure (07 = Zone 07)


Page 12 of 54

TABLE 2.1: Project summary table No Sub no Project description A PRECINCT PLANNING A0 Strategic through to implementation marketing A1 Finance funding options A2 Land acquisition and planning maters

A3 SMME and BBBEE Policy and stakeholder management

A4 Town planning processes A5 Detailed engineering investigations

A6Urban design precinct planning Architectural, Street definitions and landscaping designs

A7 Institutional management, NMC development Phase 1 B B1 ROADS AND BULK SERVICES B1-1 Golden Highway B1-2 Extension of Land Bou Road B1-3 Soweto Highway On and Off ramps B1-4 M2 West Extension B1-5 Parking and Landscaping – Zone 7 B1-6 Bulk services (water and sewer) B1-7 Phase 1 electricity service (external from the south) B1-8 Internal electrical reticulation

B2

PUBLIC TRANSPORT AND INFRASTRUCTURE IMPLEMENTATION

B2-1 Public Transport Hub

B2-2 Internal Roads B2-3 Pedestrian Mall and walkways B2-4 Pedestrian Bridge – Zone 2 B2-5 Bulk Services

B2-6 SARCC Rail link B2-7 Electrical substation (external from the north) B2-8 Buildings – Public Transport Hub B3 PARKING FACILITIES B3-1 Parking areas in Zone 7 B3-2 Landscaping B3-3 Pedestrian walkways Phase 2 C C1 HIGH STREET INFRASTRUCTURE C1-1 High Street Square C1-2 Nasrec Road upgrade C1-3 Landscaping C1-4 Walkways C2 RESIDENTIAL INFRASTRUCTURE C2-1 Residential streets and services C2-2 Roadside parking C2-3 Monorail C2-4 Electricity Internal

The sub projects are the Environmental, Traffic, Land Acquisition Planning and Design that would be required to complement the above Projects.


Page 13 of 54

Figure 2.5: Extent of Phase One Proposal


Page 14 of 54

2.5 Key performance Indicators Primary KPI’s are critical to measure the performance of the:

No KPI description P1 Marketing and branding P2 Getting land ready for release to for the UDF P3 Land manufacturing planning with respect to:

- town planning approvals - environmental record of decision - transportation planning approvals - geotechnical matters and - land survey aspects

P4 Financing in terms of Phase 1 and Phase 2 requirements

P5 Land manufacturing coordination, integration and project management including the NMC

P6 Implementation of catalytic infrastructure projects

Secondary KPI’s are supportive to the primary KPI’s and measure the performance of the: 1. Implementation

No KPI description I1 Nasrec as a brand I2 Stakeholder and SMME policy and management I3 Engineering approvals in principle I4 Architectural theme I5 Institutional management vehicles I6 Handover to the NMC

2. Socio Economic No KPI description SE1 Economic impacts (Property, Job opportunities, etc) SE2 Development Management SE3 Safety and Security and Law Enforcement SE4 Emergency Services (Health, Fire, etc) SE5 Coordination with the International Event Centre SE6 A Public Transport Hub SE7 Community, National and International support SE8 Arriving or departing to and from a large event within

45 minutes (adopted in the Nasrec infrastructure planning).


Page 15 of 54

SECTION C

3. CURRENT SITUATION Figure 3.1 Surrounding Property Market and Land Uses

3.1 Strategic Context

There is clearly no competitor to this unique development, that offers a World Class International Event Centre of mixed

opportunities and would impact positively on local, national and international levels, placing the region on a Global Map.

The following aspects have significant importance: • There is a limited timeframe available to take advantage of the

2010 Soccer World Cup and its spin-offs for Nasrec. The 2011 Rugby World cup has already included the UDFP and DFS report as part of the South African Bid Proposal.

• Significant vacant land and the absence of restrictive zoning for

development permit the greatest prospect to create a coherent development and statement. The relatively small number of landowners facilitates the realisation of this opportunity.

• Baralink and SOJO initiatives afford the area more focus with

regard to exposure, economic investment and job creation. • inclusion of the study area as a pivotal point within the East-

West and North-South Development Corridors, • The Nasrec precinct will be able to differentiate itself as a

location if the identified clusters are encouraged. This will provide a competitive advantage for property development.

• Significant existing infrastructure services in place. • Expo Centre and FNB Stadium Soccer City assets of regional,

national and international value. • Crown Mines Golf Course is a significant and established

recreational venue and open space. The course is Gary Player designed and PGA rated.


Page 16 of 54

• Relatively good regional and local access. • Excellent parking potential and capacity. • A railway station to transport and promote spectators and freight

to events and the extension and expansion opportunities it affords.

• Potential to incorporate and compound mutual value by defining

and growing the focus areas to diversify economic activity. • Demographic profile in neighbouring Soweto, especially through

the provision of job creation opportunities. It is anticipated that 8 temporary jobs will be created per R1m total expenditure. It is expected that 2281 temporary jobs will be created in the immediate term and 2006 temporary jobs in the second term.

• Limited number of landowners in the Nasrec precinct improves

likelihood of a realisable vision and eases the implementation process.

• A large amount of developable land is available.

3.2The Social, Economic, Physical, Stakeholder analysis, Natural Environment are fully described in the Urban Design Framework Plan in Chapters 2 and 3.

In summary the following can be noted:

Social –

The number of households in Region 9 has grown by 48 percent from 1996 to 2001. Unemployment in Soweto is four times higher than the neighbouring southern suburbs. Nasrec

could cater for the aspirational and mature sections of the population. Access to sports, recreational and exhibition facilities will serve to bring and integrate different cultures for shared experiences.

Economic –

The major issues that afflict the area being poor vehicular and pedestrian circulation and large tracts of surrounding vacant land among others that have created negative sentiments and a sense of despondency for development of the area. Major regeneration initiatives in the Nasrec precinct will have a far-reaching impact, not only in reversing the current trends, but in providing positive investment sentiment to the area, resulting spin-off for neighboring south western development initiatives to Johannesburg and the country as a whole.

The conservatively middle order analysis estimates an Internal Rate of Return of the full Nasrec project to be in the order of 24%. The realizing this return forms the economic potential of the area.

Physical –

The surrounding vacant land, limited visible public infrastructure and no private investment initiatives are the core of development issues, as they have tended to increase the risk profile of the area and heighten negative perceptions.


Page 17 of 54

Stakeholders –

The Institutional and Social Facilitation entailed the following:

No Description 1 Identification of all relevant stakeholders and interested and

affected parties during the Status Quo Assessment phase 2 Engage with stakeholders to identify their needs, fears and

issues during the Scoping phase 3 Facilitate stakeholders inputs regarding the intended Urban

Design Framework and Development Feasibility Report and the expected consequences of the proposed project

4 Develop a stakeholder analysis and engagement plan as part of the Development Feasibility deliverable

The aspects of need, fears and issues were raised and noted. The UDF was developed to alleviate these aspects, taken into account and addressed in the UDFP.

Natural Environment –

An environmental scan of the study area was undertaken to establish the current status and inform future Nasrec planning considerations (SEF, 2004). Specialist studies were undertaken during 2004 including an ecological assessment by SEF, a Heritage Resources Survey by Dr. Johnny van Schalkwyk of the National Cultural History Museum and Surface Water Resources Assessment by RauEcon.

The aspects of climate; topography and slimes dam, vegetation and open space; hydrology, heritage, geology and soils; and radioactivity are recorded. The UDF design caters for the environmental needs and is expected to improve the existing situation.

Mining activity –

The prospecting rights still require the raising of the level of understanding and disturbance of the existing businesses. At this stage iProp have informed the NLOF that the most of the prospecting investigations (by Crown Gold Recoveries (CGR)) will be completed by the start of the Phase 1 projects and therefore do not likely to cause problems.

Memorial Park –

Cognisance of the implementation processes regarding this Park have been input into the NLOF. Any outcome will not materially affect the UDF except for the choice of the SARCC rail line route.


Page 18 of 54

4. MARKETING

4.1 Branding

South Africa stood out as one of the most talked about destinations in the 2004 World's Best Awards survey by international travel magazine Travel & Leisure

Some 8 million foreign tourists visited South Africa in 2004, the highest number ever. This means tourism more than doubled in the 10 years since South Africa's first democratic elections in 1994, when fewer than three million foreigners visited the country.

The figures were announced at Indaba 2005, SA's premier tourism exhibition, Environmental Affairs and Tourism Minister Marthinus van Schalkwyk challenged the industry to break through the seven-million visitor threshold in 2005.

The success of the new International Event Centre node, although unique, will rely on the ability of the promoters, stakeholders and Land owners to find an appropriate balance between required financial, social and economic objectives and capitalizing on events and change their business models appropriately to attract crowds drawn by big events and precipitate growth. Yet, the long term viability of the development requires that the sites within the International Event Centre node are correctly marketed taking cognizance of the type of product that is being made available, and the price that this is offered at. The Marketing of the development needs to commence upon completion of this Stage 2: Business Planning, in order to raise awareness of the proposed development

and start attracting potential Investor and Property Market related interests. The project is located in a region of the Johannesburg Metropolitan area that has in the past seen low levels of private investment activity. Nonetheless the new node will offer excellent opportunities due to the improved mobility and highway access and competitive land values. An analysis of current demand, undertaken as part of the study suggests that the area attracts smaller entrepreneurs seeking competitively priced premises. Added to this, the area has recently seen substantial levels of investment in the residential property market and opportunities exist to build on this demand. Future demand, as well as improving on existing levels of take-up, requires the creation of a dynamic urban environment that provides an appropriately attractive mix of residential, business and leisure uses. It is in this regard that the new International Event Centre node can play an important role in stimulating investor interest in the area. A land mark with sufficient height to capture the south western Johannesburg skyline is strongly suggested; perhaps an attractive office building or exclusive hotel building could be key. The marketing success of the development will require an early buy in from property developers and investors who see market related opportunities. The development needs to take cognizance of long, medium and short term market dynamics, which also means that infrastructural expenditure and delivery should be carefully linked to potential take-up rates. The objective of the marketing programme must be to ensure that the quantum and type of space offered to the market is appropriately planned and target implemented. The institutional framework that is created should be sufficiently streamlined to ensure rapid decision making and rollout programs and provide the flexibility required to meet the requirements of potential investors and tenants . At the same time it means


Page 19 of 54

remaining true to the agreed Urban Design Framework. The success of the project will also rely on the success achieved in promoting the proposed economic clustering initiatives. Failure in this respect means that the project will not find a specific niche in the market and hence will not differentiate itself from other initiatives in the property market. To rely on existing demand trends in the area would not provide the necessary take-up that can ensure the future financial viability of the initiative. Early agreement will need to be reached on whether land will be sold or leased piecemeal to developers or whether a certain amount of development will need to be undertaken by the present owners. Such issues will impact on financing requirements as well as the way the different landowners and other interested parties decide to interact with each other. Whilst the overall marketing programme will need to be informed by the timetable and requirements of this business plan (incorporating the 2010 bid requirements), the challenge will be to ensure that the 2010 Soccer World Cup plays a role in kick starting the development. Failure in capitalizing from this opportunity could negatively impact on the longer term success of the project. 4.2 Property Market Analysis, Land Use Parameters, Requirements

and Projections Market and land use requirements have been compiled in line with prevailing market demand and supply conditions (Viruly Consulting, USDF 2004). Various development scenarios were assessed for the Nasrec precinct, including residential in addition to commercial usages. It is acknowledged that, without proper direction, land owned by different parties could develop indiscriminately and in an

uncoordinated manner. This would be driven primarily by market take-up rates as at present (Scenario 1). Alternatively, the land could be developed to target a specific market niche, where the highest and best use of the surrounding vacant land is realised, and real value is added to the region (Scenario 2). Scenario 1 would arguably lead to a low take-up rate. This is a reflection of current market trends. Scenario 2 would arguably allow the Nasrec area to outperform the market, and encourage economic clustering to emerge around the node. To what extent is each of these scenarios applicable to the Nasrec precinct? Numerous uses could be appropriate in the precinct. A destination for large gatherings, accommodation, residential and commercial developments, is all options. But research suggests that the precinct lends itself to large-scale events and related commercial activity, with the Expo Centre and Soccer City providing important anchors. Positioned correctly, development at Nasrec could be a strong experiential destination for the city, at the same time exploiting clustering opportunities. Allied commercial uses (such as retailing or manufacturing) could also be stimulated. Examples include event clothing; apparel; equipment and related activities. An accommodation and residential component to the precinct could also stimulate supporting commercial and retail activities. Envisaged components must be sensibly integrated in terms of economic clustering and the relevant value chains. The overall market and land use strategy for the Nasrec precinct should be the creation of an effective event cluster (as indicated in Figure 3.3 and 3.4), which capitalises on existing uses and infrastructure.


Page 20 of 54

Figure 3.3: Event Clustering

Figure 3.4: Nasrec Precinct Clustering Approach Take-up rate projections are based on prevailing market indicators. These were adjusted to account for accelerated take-up at a

assumed at 60%.

Tak

Hotel Commercial Residential

differentiated, cluster-led development, as per the Nasrec UDF. In other words, the calculations are based on Scenario 2 being the preferred option. Please note the following assumptions to the take-up rate forecasts: Coverage (the percentage land area covered by building roof

space) is A land usage factor of 25% was the used for infrastructure

(including roads) and public open space. The take-up demand time period is ten years. Demand is based on exhibition, conferencing and tourism

cluster development at Nasrec. It is expected that land take-up will be lumpy – i.e. relatively

large tracks of land will need to be developed in a manner that ensures the overall financial viability of the development.

e-up rate projections

Event Office Related/

otal 10yr T 15Ha. 20Ha. 23Ha.

Average per annum 1.5Ha. 2.0Ha. 2.3Ha.

Figure 3.5: Estimated Take-up Rate over a 10 year period

gest that

Looking for

Take-Up

ward, then, property market projections sugevent and hotel uses could see demand of 1.5 hectares per year;that demand for commercial uses will average around two hectares a year; and that residential will see the strongest demand at 2.3 hectares annually. These projections should inform the land use structure and the phasing strategy for the UDF; but they must also inform the feasibility study especially with regards to timing.


Page 21 of 54

5. KEY SUCCESS FACTORS FOR THE DEVELOPMENT The magnetic attraction of people of diverse cultures both nationally and internationally to a world class International Event Centre, creates a platform toward a positive economic development strategy that aims to stimulate the new and existing developments within Nasrec. This is accomplished by accommodating a new energy of development attractions sustained through concentrating and improving vehicular and pedestrian circulation between Soccer City, the Expo Centre and the Crown Mines Golf course. The significant improvement of accessibility and mobility of roads and pedestrian walkways, together with the construction of a public transport hub should promote retail frontage and development that contribute to the immediate success of the area. The economic strategy also promotes a phased development approach with a variety of uses that differentiate themselves from the surrounding market and encourages the use of showcase sustainable development typologies. In addition, capacity building programmes need to be explored to promote consolidated business development and support programmes that create an environment conducive for SMME businesses to thrive. The use of economic and social management programmes and interventions will assist the regeneration and long term sustainability of Nasrec.


Page 22 of 54

6. RISK ANALYSIS AND MANAGEMENT The identified risks are summarised below: TABLE 6.1: Risk Analysis and Management table NASREC DEVELOPMENT RISK MANAGEMENT MATRIX

Risk No Risk Description Description of Consequence Consequence Likelihood Risk Mitigation Measure

Mitigating Responsible Party

1 Land NOT released as per Urban Organic growth of the development will be Critical Remote To work fast and initiate such JDA

Development Framework restricted and could lead to delays and costs negotiation processes to obtain

making the development a failure to CoJ vital pieces of land to initiate the Town Planning processes 2 Funding

2a Insufficient Funding for 2010 related projects Power Failures and stalling of night matches. Critical Likely Obtain confirmation of Funding JDA

Chaos on Match days with Traffic congestion. from various Government and South Africa registered as a failure to host Non Government parties on time 2010 Soccer World Cup


Page 23 of 54



2b

Availability of funding on time for development Risk running unreasonable design and Critical Likely Prevent Failure of IEC Functionality JDA

construction periods with huge costs. Quality by ensuring procurement toward could be compromised with a mediocre development occurs on time. product.

2c No Legacy Funding Nasrec remains a non economic generator Critical Likely Sustainability development must JDA of jobs and opportunities to boost the South be completed hence such funding

must be secured as soon as possible

3 Environmental Problems such as the Development could be stalled indefinitely Critical Likely Ensure testing and close ENVIRONMENTALIST

National Nuclear Regulator working relationship between

Environmentalists and NNR

4 Professional Team delays project 2010 Soccer World Cup could be held Critical Improbable Project Managers ensure delivery PDNA

on a "Construction Site" with many unsafe on set milestones hazards and risks.

5 Golden Highway (not being developed) Lead to severe restrictions to traffic mobility Critical Likely Have to obtain endorsement from JDA

and accessibility to the development hence 2010 Transport Committee as a not making the venue attractive to visit. Priority for 2010

6 Not undertaking Phase 1 Power Installation Shut down of much of FNB power demand for Critical Likely

Obtain funding via City Power to effect JDA

2010 Matches Electrical Capacity development


Page 24 of 54



7 SARCC not developing Rail line through Does not meet Fifa requirements for Critical Remote Obtain consensus with 2010 JDA

Nasrec Precinct Public Transport - Lose hosting 2010 Transport Committee on the route Soccer World Cup opportunity

8 M2 West Extension Not materialising North south traffic congestions displaced Critical Likely Undertake Modelling of the Zone's JDA

to other surrounding areas. Traffic to assess generation and distribution of traffic flows based on demands for 2010 and Long Term

9 Land Applications taking too long ito Time Severe Delays to implementation programme Critical Likely Ensure that Town Planning is JDA

for Approvals 2010 development programme already tight strategically plan and effective

10

Stakeholder management - mitigation Time delays to resolve objections lead to Critical Likely EIA and Community Participation

PDNA and specialist sub-consultants

of objections stalling the 2010 and legacy developments hence to cover these aspects very opportunity to boost the south economically lost.

11 NLOF Vision not adhered to by Urban Design Framework failure to materialise Critical Marginal Have a signed mandate by all JDA

participating members an International Event Centre that compliments NLOF parties to agree on a each member's business. uniform way forward

12 National & Provincial Government Risk of losing the opportunities of capitalising on Critical Likely Need to ensure that Aspects JDA

discard development by overruling of the 2010 Soccer World Cup, Tourism and other such as Safety and Security &

UDF & Business Plan at a late stage of Economic benefits to the South are obliterated. Disaster Management are well

Implementation Nasrec remains a struggling business development accommodated throughout the development


Page 25 of 54

The following assumptions are associated with the timelines (included in Annexure B);

1. The timelines are reasonable and cater for the various approvals required during the progressive stages. 2. Where approvals may problematic, and as far as possible, the JDA must assist in obtaining such approvals, if the programme is to be met. 3. The procurement policy, must as far as possible, be reasonably relaxed to cater for a multiplicity of contractors to work on the same project,

due to the tight timeframes and deadlines. 4. The EIA process is out of the infrastructure consultants control, however dedicated and direct pressure from the City will assist this

process. 5. The EIA process takes 9-10 months to approval and such a time period is critical to ensure that the remaining time is sufficient to complete

the implementation stage in a reasonable manner. Much of the project administration (design and tender process activities) work needs to be done on risk, prior to EIA approval.

6. Many projects are planned to be simultaneously executed. 7. Commitment and dedication is required from the JDA. 8. Eskom may take a long time to provide a 11kV substation (this has to be carefully monitored) and will require a suitable location to build the

substation on the precinct.


Page 26 of 54

SECTION D

7. INSTITUTIONAL MANAGEMENT ARRANGEMENTS FOR THE DEVELOPMENT

It has been illustrated in the various socio economic interactions undertaken during the preparation of the urban design framework that Nasrec remains an “incidental” node in the minds of residents, proprietors, government officials alike. It is not too different from the perceptions that now blight the Johannesburg CBD after business flight in the early 1980’s. However, it is clear that through a careful intervention plan the CBD is showing signs of residential and general occupancy revival. The secret it appears is that a small, focussed group of committed entities and individuals charted the recovery course for the CBD. A similar strategy is recommended for Nasrec. The Nasrec Management Company should be incorporated immediately. Founding shareholders must include NLOF, local and national government and key community stakeholder representatives. This company must be charged with ownership of the development process using 2010 Soccer World Cup as its catalyst, but realising 2030 sustainable city strategies in the process. A possible management structure maybe:-


Page 27 of 54

Thus the project rollout strategy has been structured such that the phased project and sub-project rollout does the following in chronological sequence:

1. Opens the Nasrec development site with respect to accessibility and mobility to suit present and FIFA/2010 Soccer World Cup needs;

2. Improvements made to the Built Environment (by new

roads and services upgraded, etc to accommodate for this world sporting event) lead to increase in Land Values within the development and surrounding commercial, industrial and residential areas will be expected;

3. The incremental project rollout consolidates the long

term sustainability of the development;

4. The above 3 strategies economically stimulates the attraction of Private Sector Developer market to Nasrec. An attractive Marketing Strategy will be key to the successful take-up of this development.

5. The formation of a NMC comprising of Landowners and

Stakeholders ensure the long term operational management and hence sustainability of the development.

In summary, two structures are proposed, namely: 1. With JDA as implementing agent 2. Without JDA and with the NMC, operating the precinct after all

development has taken place. NMC will take over the management of the precinct.

The JDA will cover the following in realising the UDF:-

Marketing and branding

Getting the land ready for release in terms of the UDF

Complete the planning approvals required to procure the land

Arrange the necessary funding required to manufacture the

land.

Coordinate, integrate and manage the various processes

Deliver the land manufacture projects The NMC’s key functions will be to:-

Provide high level guidance

Implement a viable but aggressive marketing programme for immediate national awareness

Liaise with all key stakeholders regularly on the operating of

the precinct


Page 28 of 54

Maintain and sustain the node

Provide additional services and agreement with the UACs.

While all of the planning and facilities are being considered it is recommended that, this NMC be immediately incorporated and a business strategy drafted and implemented even before all funding for the overall business plan is in place. In that instance marketing studies and even some of the detailed design for infrastructure can be fast tracked towards meeting some of the local big event and FIFA 2010 milestones.


Page 29 of 54

SECTION E

8. THE OPERATING PLAN The UDFP sets up the infrastructure to host world class events. It is not only the 2010 Soccer World Cup event that is most important (although this event is the catalyst in implementing the UDFP through additional funds availability), but the long term sustainability of the Nasrec precinct through the greater upgrading proposals. The premise of Nasrec FNB Stadium being The Main Official Stadium (opening and closing games and Media / Communications Centre Hub for the 2010 Soccer World Cup), determines the programme for Nasrec. The present economic climate thus renders the timing of this development to be perfect. The success of this development is latched tightly onto the effective decision making and infrastructure delivery mechanisms that have to be in place. It is recommended that projects and sub-projects run concurrently based on a sound Strategic Implementation Plan. The uncompromising timelines are for Phase 1 Implementation to commence 1st August 2005 till June 2007 and Phase 2 to commence July 2008 to December 2009 (for Football International Federation Association – FIFA) approval of South Africa’s infrastructural competence to accommodate the 2010 Soccer World Cup. The socioeconomic studies undertaken during Stage 1 of the Development Process, have already proved the need and viability for this development.

Thus the project rollout strategy has been structured to achieve the following: 1. Opens the Nasrec development site with respect to accessibility

and mobility to suit present local large events and FIFA/2010 Soccer World Cup needs;

2. Improvements made to the built environment (by new roads and

services upgraded, etc to accommodate for this world sporting event lead to increase in land values within the development and surrounding commercial, industrial and residential areas will be expected;

3. The incremental project rollout consolidates the long term

sustainability of the development; 4. The above 3 strategies economically stimulates the attraction of

Private Sector Investors to Nasrec. An aggressive marketing strategy will be key to the successful take-up of this development.

5. The formation of the NMC comprising of landowners and

stakeholders ensure the long term operational management and hence sustainability of the development.


Page 30 of 54

9. OUTPUTS AND OUTCOMES The above cluster strategy (as depicted in Figure 3.4) that drives the implementation plan is key to the sustainable medium and long term success of this development. The strategy embraces benefits to society and local community, economic sustainability and upliftment for the region not only in land value but also in business conditions and social status – lifestyle. It would also provide for a positive growth environment for development of young entrepreneurial SMME organisations and inspire young minds toward taking advantage of future career opportunities for and post the 2010 Soccer World Cup and other international hosted events.

9.1 Outputs

9.1.1 Job Creation, BEE and SMME The economic and property studies undertaken taken in Stage 1 have revealed that the adjoining Southern areas of Johannesburg have a large component of unemployment and effectively makes the area an incubator for SMME entry and a growth point for new jobs. Based on statistics provided by JDA of 1 temporary job = full time employment for 1 person for 6 months where 8 temporary jobs are created per R1 million total development expenditure. Hence it is anticipated that, based on Infrastructural Capital Project Rollout expenditure stated within Financial Model the following Job creation figures may be expected:

Phase 1: 2281 jobs Phase 2: 2006 jobs TOTAL: 4287 jobs (temporary)

Where appropriate and applicable, the country’s BEE legislation will be strictly adhered to in the delivery of the infrastructure and other services during construction and operation of the NMC. Due to the various potential land uses and business mixes, it is not possible to estimate the expected number of permanent jobs at this stage.

9.1.2 Community Facilities Community Facilities will play an important part in the development integration with regional social and economic demographics for the long term sustainability of the development. The stakeholder assessments have proved that there is a high demand for community facilities such as sport, golf, Expo, recreation, education, clinics and emergency services. The development has accommodated for these within the Urban Design Framework of Nasrec. Importantly Nasrec will achieve a mixed use plan catering for sustainable activity beyond the large events alone.

9.1.3 Urban Fabric is enhanced The UDFP and its associated investment attractions will enhance the area through the “knitting” together of the urban fabric in this Southern Development Corridor.


Page 31 of 54

9.1.4 Housing delivery As clarified in the design framework recent residential developments have taken place in surrounding suburbs and demand is buoyant fuelled by professionals and blue collar employees moving out of some of the overcrowded township areas. However it is clear that a careful approach needs to be adopted to ensure an appropriate mix between the commercial, Soccer, Golf, Expo, recreation, residential and social components is achieved. The accommodation for events also needs to be supplied.

9.1.5 Economic Empowerment

South Africa’s past apartheid policies created dormitory black townships south and south west of Johannesburg where currently approximately 3 million including many impoverished people reside. Without adequate transport and services these people normally have to commute great distances to and from work and other amenities. The creation of a viable Nasrec node will be one more new opportunity to knit these communities closer to possible work opportunity apart from serving as a corridor stimulant to link the rich north with the poor south. Consequently it will be entrenched within the business plans for land, businesses, services and other opportunities at Nasrec that the regulations within the BBBee Act and the other preferential procurement laws (BR/YN to check) will be followed in all procurement activities. Indeed existing services and businesses will be encouraged to partner and create sustainable future entities to access the sporting, golf, recreational and expo developments. Importantly, employment opportunities for locals will be created.

9.1.6 Public Transport facilities The major output from the UDFP is the Public Transport Hub which will integrate the rail, bus, mini-bus taxi and private car in one area centred on the Nasrec rail station. These facilities together with the planned extension of the rail line to the west onto the Kliptown line will allow the southern western corridor commuters the potential to catch a train to work in the Nasrec area or interchange onto another mode of transport to be fed to employment places further a field. The facilities open up enormous potential in terms of transporting workers commuting to work. Secondly, the events can be served by Public Transport mode instead of currently with Private transport mode. Through park and ride systems and Gautrain, event patrons can travel by train or road based public transport which is a vast improvement to the current huge traffic congestion that currently takes place.

9.1.7 Road network completion and road upgrading It has been stated before that the road infrastructure is severely lacking in the Nasrec area. The road proposals complete the road network that should have taken place earlier. With the focus on the Nasrec node as a development initiative, the road network will encourage investment in that the accessibility and function road based traffic system will add value to the properties and the associated businesses that will trade on them.

9.1.8 Parking The further provision of parking on land not suitable for development will attract more activity in the area.


Page 32 of 54

9.2 Outcomes The positive stimulus of the International Event centre supported by the dynamic Public Transport Hub, makes for an active Node of economic activity, not only for events but for the daily tourism and local community economic viability. The uplifting development would spur an opportunity for increase in property tax levels in Nasrec and hence a long term return to Public funding used in Capital invested. The vast open spaces of land will definitely be used up hence per capita occupation of vacant land space would increase for commercial upliftment. It is a known fact in a world today that the pride of having quality built environment and in addition world class sporting facilities, will definitely influence business confidence in the area. Major business organisations thrive on their association with sport and use this as an opportunity to be “best placed” in securing loyalty to patriotic national supporters. Park and Ride (new and existing) areas are planned to be integrated into the operational system. The main beneficiaries are expected to be:

• The surrounding community as vacant land is developed and maintained

• Soccer City whose infrastructure will be upgraded • The Expo centre whose infrastructure will be connected to

the stadium via the Pedestrian Mall • The surrounding land owners through added value

• The commuters both public and private transportation by the availability of a completed rail and road network system.

• The stadium’s patrons when watching large events / matches

• The commercial sector who can start new businesses in the node

• The Soccer City, Expo Centre and Crown Mines Golf Course will attract a greater number of people and activities.

• The unemployed who have the opportunity of finding work • The City who will can support another successful node. • The International community through the hosting of

International sports and other events. • Sport, which will have an upgraded venue in which to

compete, especially with regard to improved accessibility to world-class venues.

• The CoJ who will receive rates and taxes. • The country, through increased GDP creation and SARS

through increased income tax revenue collection


Page 33 of 54

10. LAND MATTERS This section relates mainly to two aspects, namely:

1) Acquisition of land required to implement the needed infrastructure and

2) The manufacturing of land (implementation of

engineering services) 10.1 Development planning implications

Figure 2.3 in the UDF report, depicts the land ownership at a high level. The majority of the land to be developed falls on DPW owned land with a small amount on iProp owned land between the railway line and Stadium Drive.

10.2 Facilitation and agency proposals The JDA will negotiate with the private landowners where necessary in acquiring land. The JDA will propose to DPW to facilitate the releasing of public land for

3. sale as is or 4. to develop, by manufacturing the land for resale.

10.3 Roll out plan

The acquiring of land is the most immediate task in the roll out process and should be started as soon as possible in terms of the preferred roll out process.

10.4 Programms

The land acquisition programme is planned to take 12 months starting 1 August 2005.

10.5 Identified land required for development Refer to Table 10.1 for a preliminary assessment. Table 10.1: Area of land required for infrastructure.

Zone Proposed activity Basket of rights

Area of land required for

infrastructure (m2)

01 Soccer City Agricultural In place

02 Transport Hub

Agricultural / Light Industrial 12 Ha

03 Expo Centre Light Industrial In place

04 Mixed use High Street Agricultural 35 Ha

05 Residential Agricultural 25 Ha06 Golf Course Agricultural In place

07 Events Supply Park Agricultural In place

10.6 Town Planning matters

The following town planning process is proposed to be executed in this business plan.

10.6.1 Land status investigation


Page 34 of 54

At the outset, the current situation regarding the status of the land for the whole Nasrec area should be undertaken including:

� Physical, social and economic considerations of the land and its surrounds

� Land and other associated ownerships, township status, land use and mining rights, title deeds, servitudes and conditions, geotechnical conditions

� Bulk services and other infrastructure availability and required, services alignments An extensive amount of information already exists and needs to be complied and structured into a useful knowledge base for the preparation of the planning applications. Where information does not exist, this will have to be acquired and collected. An estimate of time for this would be up to 6 months.

10.6.2 Planning applications and land delivery process Specific identified developments or projects or generic land use requirements will require appropriate planning rights to be established or possibly modified. Individual planning applications will therefore need to be prepared based on the land status investigations and specific market and project requirements as they are identified and the interest and involvement of developers and investors is secured.

These applications and their respective motivations can be based on UDF which has now received approval from Johannesburg and should have been incorporated into the Regional Spatial Development Framework for Region 9.

Depending on the land and township status and the rights required, the planning application could include any one or more of possible applications such as for consent use, rezoning, subdivision, land development area or township. Applications could need to be submitted in terms of one or more legislative processes including:

� Applications in terms of the Johannesburg Town Planning Scheme are used for relatively simple and minor issues such as consent uses; or

� Applications can be submitted using the Townships and Town Planning Ordinance (1986) to establish townships and undertake rezonings. These are usually undertaken through Johannesburg Municipality. For prompt attention and swift approval processes, this will require Johannesburg Municipality's commitment to speedy delivery of the required approvals;

� An alternative route for timeous approvals is through the submission of land development applications in terms of the Development Facilitation Act (1995) (DFA). Subject to the type of application and the route selected for the application, this process could take between 12 and 24 months for each application. It is recommended that a town planning firm which has an understanding of mining land in the area be engaged to undertake the required applications (possible suitable firms can be identified and recommended by iProp).

10.6.3 Engineering services and associated costs


Page 35 of 54

Planning and design of the specific and required external or bulk and internal engineering services for the land area under application is undertaken in conjunction with the preparation of the planning application. The appropriate services guarantees or agreements also incorporated into the chosen land delivery process. Where required, detailed traffic engineering reports, based on the UDF and including public transportation issues, will also have to be prepared as part of the planning applications. The developmental and bulk contribution costs associated with the roads and services for the land application will be determined for each land application and will be determined by the rights being applied for.

10.6.4 Environmental approvals It is suggested that a Strategic Environmental Assessment (SEA) be retained to include the land development proposals, major infrastructure and services to be established as set out in the UDF. Individual Environmental Impact Assessments (EIA) as required for each application can then be prepared based on the SEA. The need for the required EIAs can be determined from the land status investigation, land and infrastructure development proposals and town planning rights required.

Substantive stakeholder engagement should be undertaken with the key role-players who are interested and affected by each separate application. This is essential to identify specific and relevant issues and resources for the

preparation of the detailed development application proposals and associated EIAs. It should be recognised that the slimes dam has an Environmental Management Plan (EMP) that is under separate legislation and therefore authority for monitoring and management. The monitoring, management and enforcement of compliance to national legislation governing the mining operations is the responsibility of the Department of Minerals and Energy. For the land development applications, reference will be required to the approved Environmental Management Plan (EMP) as required in terms of the Mineral and Petroleum Resources Development Act (Act 28 of 2002). Furthermore, any development taking place in the vicinity of any mining or quarry operations is to comply with the approved EMP for the operation and take cognizance of the mining operation plan as contained in the EMP and the associated mitigation and management measures. In addition, the erection or construction of any buildings, roads, railways, or any structure within a horizontal distance of 100 metres from the workings of the mine or quarry shall have to comply with all the requirements and obligations of the Mine Health and Safety Act (Act 29 of 1996) and the associated Mine Health and Safety regulations.


Page 36 of 54

11. PROJECTS 11.1 Overall approach The required projects have been divided into Development Phase 1 and Phase 2 as per the development feasibility report. Precinct planning is however required before both these stages which entails the overall preparation of implementing the required infrastructure.

This section depicts the infrastructural planning and implementation components as Group projects, projects, sub-projects and components thereof. Some of the components have been grouped under the key professional discipline. The costs described in the development feasibility report are brought forward to be described in this business plan in more detail as per the project grouping. The summarised list of projects is shown previously under section 2.4 11.1.1 Group Project A : Precinct Planning This is the planning required for the catalytic projects in Phase 1 and 2. This project comprises sourcing of implementation funds, land acquisition and planning, SMME and BEE policy and stakeholder management, Town planning, Engineering application services, Urban design and architectural services, land-scaping policy, institutional management and NMC development.

11.1.2 Group Project B : Nasrec development Phase 1 These are the minimum catalytic infrastructure projects required to stage the month end events including the 2010 Soccer World Cup operating satisfactory and to leverage private sector investment. This group project consists of implementing Phase 1 of the node including the roads and bulk services installations, public transport and infrastructure implementation and parking facilities. These are critical projects related to infrastructure.

11.1.3 Group Project C : Nasrec development Phase 2 This phase includes the achievement of long term sustainability for the delivery of infrastructure projects. This stage’s projects include the High Street infrastructure and the infrastructure for the residential / commercial areas. This land will be sold to the developer and the JDA will initiate the land release. These are less critical projects related to infrastructure. 11.2 Priorities plan The following priorities plan is tabled:


Page 37 of 54

TABLE 11.1: NASREC INFRASTRUCTURE DEVELOPMENT IMPLEMENTATION PLAN IN ORDER OF PRIORITY AND STRATEGY

PROJECT No. PHASE No.

PRIMARY INFRASTRUCTURE PROJECT DESCRIPTION AS PER UDF & DFS

PROJECT ROLL-OUT PLAN (Implemented in parallel)

Cost (Rand) (‘1000)

Project 1 1 1. Soweto On and Off A0. Marketing of the Entire Development: 2. Golden Highway (single carriageway) Develop Marketing Strategy Phases 1 and 2 750

3. Extension of Landbou Road to Golden Highway Implement Marketing Strategy - Phase 1 750

A1. Financial Mgt and Funding Options [JDA] JDA A2. Land Acquisition - JDA (Phase 1 and 2): 59,000 Property Market analysis Land Release Strategy Land Acquisition - Phase 1 then 2 Legal (Negotiations, Contracts, etc) A3. SMME & BEE Policy and Stakeholder Mgt 1,108 A4. Town Planning [To Be Tendered]: Land Survey - Phase 1 and 2 148

Traffic Modelling, Street level study, prioritization, and operational management plan 739

EIA 295 Legal 148 Township Allocations 148 Geotechnical 221


Page 38 of 54

A6. Urban Design / Architecture & Street + Land Scaping Design Optional



PROJECT ROLL-OUT PLAN (Implemented in parallel) Cost (Rand)

Phase 1

Design & Installation of Street Furniture for Marketing - A0 linked Included above

B1-5 Land Scaping + Parking Zone 7 5,000

A5. Engineering Planning, Design, Tender and Construction [BR]

B1-6 Civil Works (Bulk Services - Water, Sewer) Included Roads B1-1 Golden Highway Extension (GHE) 54,400 B1-2 Extension of Landbou Rd to GHE 4,400 B1-3 Soweto on & off ramps 22,100 B1-7 Electrical Power Supply - Phase 1 22,100 B1-8 Internal Electrical Reticulation 28,100

Quantity Surveying and Infrastructure Cost Management Included

B3-4 Pedestrian Walkways - Branding Implementation 50,000

A7. Institutional Management - NMC development - JDA 370

TOTAL 249,777


Page 39 of 54




Cost (Rand)

Project 2 1. Pedestrian Bridge 1. Engineering Planning, Design, Tender and Construction

B2-3 Pedestrian Mall 42,200 B2-4 Pedestrian Bridge - Zone 2 7,000 1 2. Public Transport Hub / Interchange B2-5 Civil Works 1330 B2-2 Internal Roads 7,000 B2-8 Building Works Optional

B2-7 Electrical Power Supply - Phase 2 Substation (From the north) 81,300

B2-1 PT Hub 74,000 B1-5 Land Scaping + Parking Zone 7 5,000 TOTAL 217,830

1. Engineering Planning, Design, Tender and Construction

Project 3 1 Parking areas (Balance of Zone 7) B3-1 Civil Works 4,700 B3-2 Land Scaping 5,000 B3-3 Pedestrian Walkways 31,300 TOTAL 41,000 Project 4 1 High Street Square 1. Engineering Planning, Design, Tender


Page 40 of 54

Construction C1-1 High Street Square 4,400 C1-2 Nasrec Road Upgrade 11,600




C1-3 Land Scaping 8,300 Nasrec Road Upgrade C1-4 Civil Works 3,300 C1-5 Pedestrian Walkways 91,000 TOTAL 118,600

1. Engineering Planning, Design, Tender and Construction

C2-1 Civil & Electrical Works 76,400 C2-2 Roadside Parking 8,300

Project 5 2 Residential Streets and Services 2. Urban Design / Architecture & Street + Land Scaping

Community Sites and related developments

Monorail (Zone 5) TOTAL 84,700 Project 6 2 B1-4 M2 West Extension 195,200 TOTAL 195,200

TOTAL 907,107


Page 41 of 54

11.3 Phase 1 – August 2005 to June 2007 11.3.1 Objectives The objectives of this stage is to coordinate and integrate the business growth and development of the:

• Upgrading and completion of the Nasrec nodal infrastructure to facilitate private or possibly public investors to make an attractive return on their capital

• Upgrading the Soccer City public precinct around the

Stadium and its associated infrastructure and operations to a standard acceptable for the 2010 Soccer World Cup (FIFA).

• Provision of a vibrant node in which new work and business

opportunities will be provided.

• Provision of a vastly upgraded Public Transport system allowing commuters a new mode of transport in which travel to work, shop and entertainment.

• Upgrading of the Expo Centre to attract international events

11.3.2 Process The proposed process is focused along normal development processes for each project including:

• The Government, City of Johannesburg and the JDA will seek funding and control the full process

• Formation of a Nasrec Management Company (NMC) to manage the process beyond the implementation phases

• Sourcing of project funds • Concept layouts • Marketing • Legal contract procurement • Professional team appointments • Provision of infrastructure • Handover to the NMC, UACs or other relevant end users.

11.3.3 Proposed projects In this Development phase, three projects and 19 subprojects are described in detail in Annexure A. They include Road and bulk services infrastructure, public transport facilities and parking facilities. 11.3.4 Factsheets The factsheets included in Annexure A contain the descriptive nature of the project, motivation, implementation institution, current status, infrastructure needs, programme, preliminary budget and funding source. 11.3.5 Phasing In this business plan, there are two main phases, the first starting in August 2005 and ending in June 2006. Further subphases are possible depending on the availability of funds. 11.3.6 Time lines The timelines for all the projects is contained in Annexure B, including projects, subprojects and components thereto.


Page 42 of 54

The total time allocated for this phase is 35 months, from 1 August 2005 to end June 2008. Project timelines have been drawn up with the constraint that Phase 1 must be completed by the end of June 2008 and Phase 2 by December 2009 It is essential to note that the EIA’s record of decision and the town planning approvals are required before construction can start. This period has been assumed to take 10 months assuming no appeal processes.

11.3.7 Costs The total cost summary is contained in Table 11.1 which shows the projects, construction cost, contingency, escalation, professional fees, VAT, total cost, duration (months), start and end dates. The total cost for Development Phase 1 is R 925,0 million over 35 months 11.4 Phase 2 – July 2008 to December 2009 11.4.1 Objectives

• Land release programme from the Department of Public Works

• Integrating the bulk contributions paid with the exception of some roads needs.

• Integrate the existing functions with the Golf Course so as to

complete the urban fabric of this section of the southern corridor

• Provide residential development at an appropriate level

• Provide commercial development in an appropriate manner.

• Provide a Market Square for the benefit of the community

• Change Nasrec Road into a High Street type Road for the

benefit of the community 11.4.2 Process The JDA will continue its development function in continuing to implement the land on the eastern and central sides of the node. 11.4.3 Proposed projects In this Development phase, two projects and 8 subprojects are described in detail in Annexure A. They include road and township services infrastructure, a market square, a high street, walkways and landscaping, roadside parking and a monorail (should the NMC approve of such a project). 11.4.4 Factsheets The factsheets included in Annexure A contain the descriptive nature of the project, motivation, implementation institution, current status, infrastructure needs, programme, preliminary budget and funding source. 11.4.5 Phasing In this phase, the starting date is July 2008 ending in December 2009, although depending on the take-up rate, could be ongoing.


Page 43 of 54

Further subphases are possible depending on the availability of funds. 11.4.6 Time lines The timelines for all the projects are contained in Annexure B, including projects, subprojects and components thereto. The total time allocated for this phase is 18 months, from 1 July 2008 to end December 2009. 11.4.7 Costs The total cost summary is contained in Table 11.1 which shows the projects, construction cost, contingency, escalation, professional fees, VAT, total cost, duration (months), start and end dates. The total cost for Development Phase 2 is R 202,9 million over 18 months 11.5 Summary In summary, the following is proposed Development Phase 1 – August 2005 to June 2007 requiring R882,5 million to build the roads and bulk services, public transport facilities, and parking facilities. Development Phase 2 – July 2008 to December 2009 requires R169,9 million to build the High Street infrastructure and residential townships.


Page 44 of 54

Fig 12.1 Index of major projects


Page 45 of 54

TABLE - Development Infrastructure Plan (.xls)


Page 46 of 54

12. FINANCIALS 12.1 Development Costs The total development costs can be summarised as follows: TABLE 12.1: Development cost estimate

No Cost item

Amount(2005 R million)

1 Construction costs 6252 Contingency and escalation 1453 Professional and development fees 1554 Development management fee Included5 VAT 130 Subtotal – Phase 1 925

6 Construction costs 1237 Contingency and escalation 358 Professional and development fees 349 Development management fee Included

10 VAT 28

Subtotal – Phase 2 203 TOTAL 1128

12.2 Cashflow and budgets

The following summarises the budget required to carry out the two development phases.

TABLE 12.2 Development budget estimate

Quarter

Budget item

Amount (2005 R million)

1 August to September 2005. 30 2 October to December 2005. 60 3 January to March 2006 100 4 April to June 2006 100 Subtotal for 2005/2006 290

5 July to September 2006. 120 6 October to December 2006. 120 7 January to March 2007 120 8 April to June 2007 100 Subtotal for 2006/2007 460

9 July to September 2007. 100 10 October to December 2007. 100 11 January to March 2008 91 12 April to June 2008 87

Subtotal for 2007/2008 378

TOTAL 1128


Page 47 of 54

12.3 Sources of Funding

Currently the JDA are pursuing a number of funding avenues, described below.

12.3.1 City of Johannesburg – Treasury JDA have been granted R 15 million in this 2005 / 2006 financial year for the implementation of projects

12.3.2 Public Sector (Outside CoJ) The only source of Treasury funding that has been made known to the JDA is from the NDOT who have requested a budget from the CoJ for public transport projects relating to the 2010 Soccer World Cup. PD Naidoo & Associates prepared a short report and included the Soweto ramps, Public Transport Hub on the northern side only, internal roads, pedestrian mall and associated walkways. The total budget submitted to NDOT was R 318,7 million, Refer to Figure 12.1 for the layout relating to the funding proposal. An application from the National Department of Transport (NDOT) for R1,7 billion for the 2010 Soccer World Cup sourced from Finance and Economic Affairs, has been made for the Nasrec link rail line. The expanded Public Works programme could also be a source. However, no funds are currently available. The problem is spending public money on private land. This problem needs to be addressed.

Fig 12.2 Public Transport Road Network


Page 48 of 54

12.3.3 Semi-Public Sector (Government Parastatal) The DBSA and IDC appear to be opportunities for external funding.

12.3.4 Private Sector A fund raising process will be started shortly in order to raise funds for capital as well as operational budgets.

12.3.5 Donors Big business could be a possibility. The sponsorship of events, billboard advertising (of which 10 board positions have been identified) as well as other donation type funding have previously been used at Soccer City and are likely to form part of the funding source in the future.

12.4 Funding options Four funding options have been identified, namely Option 1 – Conventional Option 2 – iProp/Andrew Option 3 – Bank route Option 4 – Land release option Option 5 – Combination of the above

Option 1 – Conventional In this case, finance is raised based on seed capital and expected rate of return. The infrastructure is constructed and the land sold off to cover the costs and realise a gain. This method introduces a large time lag between spending and revenue, which creates cash flow problems. However, in the case of government spending this is a typical approach. Option 2 – Off setting of external contributions The payment of the external engineering contributions to the Municipality is replaced by the payment to the contractor, for projects of community benefit. In this way the infrastructure funding requirements are substantially reduced. However, based on recent discussions with the Municipality, the Municipal Funding Act may prevent such an option from being realised, due to legal problems associated with this process. Option 3 – Bank route In this case, after the planning and rights have been approved, the bank steps in to finance the installation of the infrastructure for an equity stake in the development. This method allows the bank to absorb much of the financial risk for a stake in the gains. Option 4 – Land release option In this option the land is released by the owner for no or little cost, which in effect is a donation.


Page 49 of 54

Option 5 – Combination of the above In addition to the combination, mezzanine finance is also possible to top up the difference between the acceptable finance percentage (eg 70%) and the outstanding balance (eg 30%). The 70% can grow to 90%. Although the debt percentage increases, the cash flow considerations are normally vastly improved especially for large projects.

12.5 Funding strategy Based on project cost table in Sect 11, the funding strategy is shown in the Table 12.2 below:


Page 50 of 54

Funding strategy table (.xls)


Page 51 of 54

12.6 NASREC 2005 / 2006 budget proposal The JDA have been allocated R15 million for the Nasrec project in the 2005/2006 financial year. In terms of this budget, the most pressing projects or part thereof, have been selected for immediate implementation. As agreed by the Nasrec NLOF, the tabled budget have been prepared for immediate implementation. Figure 12.2 shows the proposed 2005 / 2006 projects.

Fig 12.3 Proposed Budget – Soweto Highway Ramps


Page 52 of 54

Details of the components are contained in Table 12.3 below: Table 12.4: 2005/2006 budget proposals

No Item Amount(R1000)

Proposed budget

1 Pre-funding for the business plan 400 4002. Marketing and Branding design 500 500 Marketing and branding

implementation 500 500

3. Roads3.1 Soweto Highway ramps (1,5 kms) 7 000 7 0003.2 Closure of existing access points 100 100 4. Walkways4.1 Randshow Road 450 04.2 Nasrec Road 450 04.3 Parking area (west of stadium) 500 0 5. Pedestrian Bridge – Soweto

Highway 5.1 Closure of bridge

(Structurally no change) 100 100

6. Electrical6.1 Phase 1 supply (from the south) 9000 06.2 Nasrec Streets lights 500 5006.3 Walkway lighting 800 05.4 Stadium walkway 250 0 7 Specialist transportation studies 500 400 - Transportation modelling

- Transport priorities determination - Transportation street model and

operational plan

8 Billboards (10 off)* 1400 0 9 Fence on Soweto Highway 100 10 Project A - Planning - Town planning 100 - Environmental (high level) planning 100 - Geotechnical (high level) 50 - Land survey 50 TOTAL 9 900 Add contingencies @ 10 % Add professional fees @ 15% Development Management fee @ 5% Add VAT @ 14% TOTAL add @ 51,4% BUDGET TOTAL 15 000 * The erection of billboards could be proposed as a separate project

as it is revenue producing which normally pays for the capital outlay.


Page 53 of 54

13. IMPACT OF THE Johannesburg 2010 SOCCER WORLD CUP ON THE TRANSPORT PLANNING

13.1 Introduction As part of the transportation planning for the Soccer World Cup, the NDOT appointed Axios and Arcus Gibb to investigate the transportation requirements for the 2010 Soccer Cup. A presentation of the results were supplied in July 2005 and are addressed in this chapter with respect to the Nasrec node planning. Four areas stand out as important, namely:

• Nasrec – Soccer City • Ellis Park – Ellis Park Stadium • Sandton – Hotels • JIA – Airport for international visitors

The transportation requirements and estimates for each component were contained in the received information. The 2010 operational plan is currently being discussed at present.

13.2 CoJ Transport Planning implications The main finding is that public transport will be the focal transportation system conveying some 70 percent plus spectators to the stadia. The worst case occurs when four games are played in Gauteng on the same (somewhere in the middle of the event). The SAPS have indicated that a no-vehicle zone of 500 metres around the stadia is required for security reasons.

In Nasrec’s case, this means the northern section of the Public Transport Hub and the Nasrec Station would not be able to be used for the 2010 games. In response to such as request, the following is submitted:

• The legacy of the Public Transport Hub for Nasrec will not be built

• The public transport choice of mode will be extremely difficult to implement.

• The operational plan will require other private land to be made available in order to accommodate the public transport vehicles, especially the 400 buses.

13.3 Recommendation At this early stage, it is recommended that instead of a 500 meter circle around Soccer City, that a rectangular security zone is made available as shown in Figure 13.1 as follows:

• Soweto Highway in the north • Nasrec Road in the east • Stadium Drive in the south • Golden Highway in the west

This rectangular security zone allows the Public Transport Hub legacy, the 400 buses and the transport operational plan to take place as planned in this business plan and in the CoJ planning.

Nasrec Development JDA: 022/001 Stage 2: Business Plan September 2005

Page 54 of 54

FINAL

Fig 13.1 Proposed 2010 Soccer World Cup security area for Nasrec (as required by SAPS).

Documents

FINAL CONTENTS Page No. SECTION A 4 1. INTRODUCTION 4